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House Financial Services Grilling of Hank Paulson vs. ‘Recession Over’ Headlines
Michigan Senator James Couzens interrogated Mr. Walter Sachs, founder of Goldman Sachs, re operating a Ponzi Scheme, which harmed the public. Markets fall the amount they are financed when the money comes due and can’t be paid. The 1929 market Dow did not stop falling until it fell 89% lower to 41.22 at the end of 1932. In those three years GS public stock trust fell from $222.50 to $1.75.
Millions of people were put out of work by the financial collapse, which lasted from 1929 to 1954 and included a World War falsely credited for the recovery. It was savings that led to economic recovery.
In this Jubilee Generation, our Washington leaders from Wall Street, with their government monopoly media enablers, again seemingly ignored the lessons of history. They eschewed candidates like Ron Paul who warned what was coming. Is it more likely they were innocent, naïve or deliberate?
Somehow Hank Paulsen managed to sell his Goldman stock before the debacle and buy bonds. He and his accomplices did not blow any whistle for financial fouls committed by their firms.
By 1999 the Chairman of Goldman Sachs, a future Treasury Secretary who paid no taxes on the $480 Million of GS stock he sold, along with others in Wall Street Towers and in Federal Reserve Walnut Paneled Club Dining Rooms, successfully lobbied for the repeal of the Glass Steagall Act.
These speculators disguised as bankers removed the Glass Steagall Act which for 66 years protected our banks and depositors. They avoided Commodity Futures Trading Commission regulations that created a third-party guarantor for risky and transparent derivatives. They ignored balance sheet mark to market with off balance sheet off shore speculations and repudiated sound banking practices like the 10% net capital rule.
Banks piled on $200 Trillion of hidden unregulated bank-to-bank counter-party derivatives, including Debt and Mortgage Credit Default Swaps. These weapons of mass financial destruction dwarfed big bank balance sheets. They were valued by academic models instead of transparent real world market transactions. The rest of the morality play became history, as Mrs. Market peaked in 2000 in real terms and entered the Winter season of our Jubilee Generation, with a nominal visit to new highs in the Fall of 2007 when we called another top.
